Croda dives as hit from strong pound is rated at £6.5 million

Shares in chemicals maker Croda International tumbled today after the company warned that the strong pound would hit its full-year profits

The company, which supplies materials to Unilever, L’Oréal and Procter & Gamble, said the currency’s strength compared with the euro and dollar was likely to impact its second-quarter pre-tax profits by £6.5 million.

Croda shares fell by 9.5% to 2177p. Although the group only generates about 5% of revenue from the UK, it reports its earnings in sterling.

“The modestly improving underlying sales trend seen in recent quarters in our core consumer care and performance technologies divisions has continued into the current period, though market conditions remain subdued, especially in Europe,” Croda added in a statement.

Analysts at Liberum said: “As we documented earlier in the week, we believe Croda’s recent woes have a structural component and are not just cyclical and we are sceptical that it is an M&A target, which is the only argument for it holding up.”